800 Ruling Bans Blocking of Generic Terms

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Companies now will have a harder time holding on to their generic vanity market according to a recent ruling by a New Jersey Court that said trademarks using 800 with a generic term cannot preclude the use of similar telephone numbers.

The case appeared before the District of New Jersey Court when New Jersey liquor and gift delivery company, 800 Spirits Inc., (1-800-Spirits) filed a lawsuit seeking to prevent Liquor by Wire from using the telephone number 1-800-Spirited. According to the ruling, Illinois-based Liquor by Wire, Inc. has permission to use the toll-free number 1-800-Spirited in its international liquor and gift delivery business.

The court held that the term "spirits" is generic to 800 Spirits' and Liquor by Wire's liquor gift-delivery businesses. The court reasoned that fair competition is hindered when a business prevents the use of a toll-free telephone number by developing rights to a trademark comprising 800, 888 or 877 followed by a generic term.

"This case affects the telemarketing industry as a whole," said Steve Olsher, vice president, Liquor by Wire. "It opens the door to fair competing across the board. Based on this dismissal, you can't protect a generic term. It doesn't hold water."

"It is not a surprising decision," said Errol Copilevitz, senior partner, Copilevitz and Canter, P.C., a law firm serving the direct marketing industry. "Generic terms can not be trademarked or protected and are considered to be in the public domain. As a result one user can not exclude another."

Although it is good, said Copilevitz, "companies shouldn't go in and create a name that is so similar to another as to cause confusion and thereby subject themselves to potential liability in a civil lawsuit for unfair competition."

"This does not affect the ability of right to attain a phone number that is in use that is the same i.e., 1-800-Flowers, 1888-Flowers. No one can come in and get 888 spirited. But it does say somebody go ahead and develop a competing venture using another term, i.e., 1-800-Violets. They should not be hindered from doing so," Olsher said.

Liquor by Wire has been servicing both consumer and corporate gift-delivery needs since 1939. Operating in similar fashion to FTD of the floral industry, Liquor by Wire utilizes only local, licensed, alcohol beverage retail affiliates for its gift deliveries. Because of its use of local affiliates, all state taxes are paid and there is no issue of interstate shipping. Orders are placed via telephone (1-800-Spirited), via fax (1-800-2-Fax-LBW) or online (www.liquorbywire.com). Liquor by Wire is represented by Laff, Whitesel, Conte & Saret Ltd., a Chicago intellectual property law firm.

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